The Department of Labor is working with the SEC to investigate "pension consultants" who may not be living up to the fiduciary responsibility of advising retirement plan participants.
The lawyers at Drinker Biddle say they've been directly involved in at least three DOL probes of broker-dealer firms and heard of five others over the last few months.
DOL seems to be enforcing all aspects of the fiduciary relationship that any advisor who works with employer-sponsored plans nominally has with his or her "clients," the workers in the plan.
Undisclosed kickbacks from product vendors are already a focus area, with at least one advisor and the associated broker-dealer already earning a $300,000 fine for failing to disclose all compensation.
As Drinker Biddle points out, the first round of DOL "audits" has been unusually onerous for the firms involved, simply because of the amount of documentation the government is asking to see.
But, they note, with new disclosure rules for retirement plans on the horizon, the ERISA environment is getting even stricter.
Advisors who work with these accounts should take a look at the law firm's notes and ask themselves whether their own records are in good enough shape.